Movie Distribution in the Age of Online Streaming

Whenever we speak of “evolution”, we always have to keep in mind that it’s a process with both winners and losers. Winners are those who are better at adapting to the environment that’s changing. Losers are those that can’t. The same goes for every aspect of our lives, not only in the plant and animal kingdoms: from industry to technology and society as a whole. The evolution of technology was felt in its entirety by the movie industry, both in the way the content is produced and distributed. Today, let us take a look at the way the latter has evolved over the years.

From movie theaters to home media

Movies were, at first, shown to the public in a way similar to our movie theaters. People would buy tickets to sit through a motion picture showing – for lack of a better alternative, that is. Then TV was created, and things changed – the moving pictures invaded our living rooms, turning them into spaces like TIFF 17: slim, slick & packed with movie magic. Traditional movie theaters didn’t disappear, though – their entirely different experience (and the fact that they were the ones to show new movies) has kept them alive to this day. As time passed, new ways to consume media were invented.

The first VCRs appeared in the mid-1960s, and they reached mainstream success in the 1970s, ruling the home media industry until the late 1990s when DVD first appeared, which was itself replaced by Blu-ray later, which brought a truly high-quality movie experience into people’s homes.

Rentals to “DVD by Mail”

The first video rental store was created by German film enthusiast Eckhard Baum in Kassel, Germany, in 1975. He had a collection of films on Super8, which he often lent to his friends – and later turned this into a business. George Atkinson created the first professional video rental business in the US in 1977, with 50 titles licensed from 20th Century Fox and rented them out on VHS and Betamax cassettes created by home video duplication service Magnetic Video. This has led to the creation of massive rental chains like Rogers Video, West Coast Video, and the famous Blockbuster in the early 1980s.

The first major attacks on this business model were the creation of “VoD” (Video on Demand), offered by cable TV operators since the 1990s, and the creation of VHS-by-mail services, which later turned into “DVD by mail”. Netflix, today’s best-known media distribution company, was born in the late 1990s as a “DVD by mail” company, offering a subscription-based service to its customers.

Transition to streaming

Netflix first introduced online streaming in 2007, offering its subscribers around one hour of online streaming per each dollar spent on subscription in addition to their agreed services. By the next year, the company lifted this limitation, and later, it separated its physical rental service and its streaming service and slowly continued growing into the service we know today.

The company has played an important role as a film distributor, too. Initially, it licensed and distributed independent productions through its division called Red Envelope Entertainment, which later transformed into in-house content production. The production of its famous “original” series “House of Cards” began in 2011, and the series debuted in 2013 to major success. The range of content produced and distributed by – or for – Netflix grew fast, covering everything from family entertainment to drama and science fiction shows like Sense8, Orange is the New Black and Stranger Things.

At the same time, several competing streaming services have appeared, usually backed by content creators or distribution companies creating their own original content – usually in short form. Movie theaters have remained the medium through which new feature films reach the audiences but after their premiere, they reach viewers less through TV channels (even subscription-based ones like HBO) and more through online streaming, which seems to dominate the market in the age of computers and smartphones.

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